Apple's 'iPhone 8' predicted to revive iPhone growth despite later October ship date
Apple will announce its flagship OLED iPhone in September, but ship it in October -- still potentially achieving impressive sales, according to an analyst memo obtained by AppleInsider.
The delayed shipment is because of "challenges with the OLED curved screen," said Gene Munster of Loup Ventures, citing a talk with a component supplier. As result, the analyst is calling for shipments of 39 million iPhones in the September quarter -- well below a Wall Street consensus of 49 million, as well as the 45.5 million phones Apple shipped in the Sept. 2016 quarter.
Munster anticipates 6 million shifting into the December quarter, however, and an extra 4 million in the March quarter, with supply and demand only then balancing out. The analyst suggested in fact that while the iPhone 7 cycle will likely generate flat unit growth versus the iPhone 6s, the next iPhone cycle should see an an 8 percent rise.
Revenue is meanwhile predicted to grow 11 percent, mainly due to a higher average selling price spiked by the OLED iPhone, commonly referred to as the "iPhone 8." The figure should increase from $651 to $674, Munster said, working on the assumption that the new phone will cost over $1,000.
"This new high-end SKU should run about $47 per month on the iPhone upgrade program, compared to $41.58 today for the entry level iPhone 7," he wrote.
Interest is reportedly higher in the "iPhone 8," based on a Loup survey of 501 people in the U.S. conducted the weekend before Apple's recent Worldwide Developers Conference. Of 220 current iPhone owners, 25 percent said they were planning to buy the next iPhone at launch -- a jump from 15 percent in a July 2016 poll.
Of the people planning to upgrade, 54 percent said they were interested in augmented reality features, despite the survey coming before Apple's ARKit announcement on June 5. It's uncertain what sort AR-related hardware the "iPhone 8" might have, but ARKit will give developers software tools for bringing the technology to iPhone and iPad apps.
The attraction of AR is low outside of the iPhone sphere, Munster observed. Only 14 percent of people not planning to buy an iPhone expressed interest, and even among Android owners, interest was only slightly higher at 20 percent.
The delayed shipment is because of "challenges with the OLED curved screen," said Gene Munster of Loup Ventures, citing a talk with a component supplier. As result, the analyst is calling for shipments of 39 million iPhones in the September quarter -- well below a Wall Street consensus of 49 million, as well as the 45.5 million phones Apple shipped in the Sept. 2016 quarter.
Munster anticipates 6 million shifting into the December quarter, however, and an extra 4 million in the March quarter, with supply and demand only then balancing out. The analyst suggested in fact that while the iPhone 7 cycle will likely generate flat unit growth versus the iPhone 6s, the next iPhone cycle should see an an 8 percent rise.
Revenue is meanwhile predicted to grow 11 percent, mainly due to a higher average selling price spiked by the OLED iPhone, commonly referred to as the "iPhone 8." The figure should increase from $651 to $674, Munster said, working on the assumption that the new phone will cost over $1,000.
"This new high-end SKU should run about $47 per month on the iPhone upgrade program, compared to $41.58 today for the entry level iPhone 7," he wrote.
Interest is reportedly higher in the "iPhone 8," based on a Loup survey of 501 people in the U.S. conducted the weekend before Apple's recent Worldwide Developers Conference. Of 220 current iPhone owners, 25 percent said they were planning to buy the next iPhone at launch -- a jump from 15 percent in a July 2016 poll.
Of the people planning to upgrade, 54 percent said they were interested in augmented reality features, despite the survey coming before Apple's ARKit announcement on June 5. It's uncertain what sort AR-related hardware the "iPhone 8" might have, but ARKit will give developers software tools for bringing the technology to iPhone and iPad apps.
The attraction of AR is low outside of the iPhone sphere, Munster observed. Only 14 percent of people not planning to buy an iPhone expressed interest, and even among Android owners, interest was only slightly higher at 20 percent.
Comments
I think we can expect several blockbuster AR apps in the fall. AR will be huge for games, education, retail, story-telling etc.
This will drive upgrades of iPhone and iPad. With AR your device becomes a window through which you view virtual elements in the real world. I think the experience will feel better on iPad and this will be the first time there has been a compelling reason for iPad owners to upgrade.
The new iPhones may have some more advanced hardware sensor that will allow users to do high quality 3D scanning. If so it will open up the ability for users to create AR content that they can share. This could be huge.
The actual question is - If it is NOT going to impact actual user experience AT ALL in ALL scenarios, why would Apple "limit" the performance of Qualcomm supplied modems to match it up with Intel modems? Users would NOT see the difference anyway (even if Apple allowed the Gigabit downloads in QC modems), isn't it?
Even though it is still a "rumor" at this point, everyone seems to agree that Apple would "limit" the performance of QC modems in next generation of iPhones. What is the actual reason for Apple limiting the performance of QC supplied modems? There are no valid answers provided for that question yet.
Sales pretty much peaked with the iPhone 6. The 6S and 7 sales are pretty flat as opposed to the double digit growth in previous years. The problem is that Apple stock price is predicated heavily on continued growth. Even though the iPhone 7 is holding its own, the lack of growth is a problem and can be traced back to Apple using essentially the same design for three generations of devices.
I think the 10 million difference in his estimate is a result of the expectation the iPhone 8 won't ship until after October 1. Apple has typically sold about 20 million of its latest devices during the month of September. All of those sales will be deferred into the next quarter if the new phone is delayed. I don't see a huge market for the iPhone 7S, it is going to be limited to those that can't afford an iPhone 8 and need a new phone now; in the Apple customer base that isn't going to be a whole lot of people.
BTW, the S8 is NOT the only current phone that can use a carrier's 4G Gigabit network, and certainly not the only one this year. Expect a dozen or more before the end of 2017, and several metros where you can use 'em.
What I don't understand is why iOS 11 won't be available until the Fall -- Fall 2017 starts Sept 22.
I am running iOS 11 on an iPhone 7 and an early iPad Pro 12" -- and have found no real problems.
I am also running macOS High Sierra on my iMac 17" 5K.
There are a lot more problems with High Sierra than iOS 11 -- but there is a planned public beta of High Sierra later this month.
This seems weird! Why not let the iDevice users exploit iOS 11? Especially iPad users!
I suspect that there are things (or hooks) in iOS 11 that Apple doesn't want us to see yet.
Maybe there are other hardware/software shoes to drop before the iPhone 8.
Don’t give us that “Who, ME?” look. Your history here belies that.
Apple nips that in the bud with all of the attendant flak that goes with that, and really no harm, no foul to almost all users. Then, it's all but forgotten until the next iPhone release, when it will be all Intel, and all Gigabit capable.
Perhaps, in late 2018 or early 2019, Apple will enable the full bandwidth of those iPhone 8's using Qualcomm modems. That's actually wouldn't be a bad solution.
You're using the developer beta aren't you?
My guess is that when the public beta is available, it will be stable enough that Apple doesn't need to worry about major support issues.
Gruber's review; "no buts".
https://daringfireball.net/2017/06/the_2017_ipad_pros
I posted something on Mondaynote that I recently remembered that I think is a good analog for Apple's success;
Punctuated Equilibrium
https://en.wikipedia.org/wiki/Punctuated_equilibrium
I think that this analog accounts for how and why Wall Street can't properly value Apple.
My experience is similar to Gruber's -- tho, on an older device.
Mmm... Read the Mondaynote article and Your post. I think both are spot on! As I think back on the Apple that I have observed for 39 years... that's exactly how they roll!
Gates are inevitable as long as dual/multi sourcing happens, isn't it? I don't see any reason why apple cannot handle modemgate (which is inevitable!!!), the same way the chipgate was handled. And I don't see courts intervening in this, rightly so.
Edit: I did not explain why Modemgate is inevitable even if Apple throttles the performance of QC modems. The "theoretical" upload/download performance of next generation brand new iPhones would be compared against Samsung S8/HTC U11/One Plus 5/Sony Xperia XZ Premium etc, and will be declared as "Inferior" compared to "Android" competition. So you have all the necessary ingredients for the "ModemGate" right there, isn't it?